Executive summary

The self-storage industry in 2026 is at a critical inflection point. After 28 months of declining street rates and elevated new supply, key market indicators suggest stabilization and emerging opportunities for sophisticated investors who understand market dynamics.

Key Market Themes for 2026:

• Supply Normalization: New development pipeline at 2.7% of existing stock as of Q3 2025, projected to decline to 2.0% by 2027
• Rate Stabilization: Street rates reached stabilization in mid-2025 with 0.0% year-over-year change, indicating market equilibrium
• Geographic Divergence: Secondary markets showing superior fundamentals compared to primary markets
• Demographic Tailwinds: Household formation and urbanization trends supporting long-term demand
• Capital Market Opportunities: Rising interest rates and market conditions causing slow down in new development creating opportunities in the 2027-2031 timeframe for well-capitalized sponsors
• REIT Performance Gap: Storage REITs demonstrating pricing power with +1.1% YoY advertised rate growth vs. -0.6% for non-REITs"

Bottom Line: While 2022-2025 challenged many self-storage investors, the industry's fundamental strengths remain intact. Disciplined sponsors with patient capital and conservative underwriting are positioned for strong performance in the current environment.